City's economy shift from industrial to services has 'led to low employment rate'

A view of Nottingham's skyline. The city has the lowest employment rate of major UK cities, according to a report (Image: Nottingham Post)

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A fall in secure and highly-skilled jobs has led to Nottingham having the lowest employment rate of all major UK cities, it has been claimed.

According to a new report , the number of people in work in the city decreased by more than 13,000 from 2015-2017. This brings the employment rate down to 57% for people aged between 16-64.

The research, conducted by the Nottingham Civic Exchange, has been based around ONS statistics.

In addition to the employment rate, it also reveals full time roles in the city have fallen 12% in the two-year period and while wealth created in the city is high, Nottingham still has the lowest average household income in the UK.

Gross disposable household income in 2016 was £12,232 per head, according to the report, well short of the national average of £19,432.

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There has been a slight rise in the average hourly earnings of workers in Nottingham, up to £11.61 in 2018, but that is still significantly behind the county as a whole at £13.78 and a national average of £14.37.

The Laying the Foundations of a Good Work City report was presented at Nottingham Trent University, where the Civic Exchange is based, on March 27 - and business owners have given a mixed view of the findings.

Heidi Hargreaves, owner of gift shop Dukki in St James's Street, which makes products adorned with Nottingham sayings and phrases, has recently taken on a new member of staff who had been working full time but had chosen to reduce her hours.

She said: "She is on a zero hours contract but we do offer her at least 14 hours a week. We like the flexibility and she is happy with that, but in terms of employing somebody full time, it is not an option for us."

On the matter of low disposable income and fewer people being in work, she added: "If anything, people are spending just as much as they were before but that coincided with us moving to a smaller shop.

Heidi Hargreaves, of Dukki (Image: Niottingham Post)

"We thought there would be a change from being in the Broadmarsh where we had a bit more footfall, but I think the average spend has gone up.

"While it is higher it might be less frequent. I think there are a lot more people, myself included, who are watching the pennies all the time. There is definitely that kind of uncertainty at the moment."

Ross Bradshaw, owner of the award-winning Five Leaves Bookshop in Long Row, said his shop has enjoyed a sustained period of growth, alongside the book industry as a whole.

But he added: "We have noticed while doing external book stalls that there is something of a resistance to more expensive books. People say they would like to buy these things but they just don't have the money."

Meanwhile, Webb Freckingham, owner of the Cheese Shop in Flying Horse Walk, said he had not seen any decrease in people coming to his shop and he now employs five full time staff members and two part time.

Webb Freckingham, owner of the Cheese Shop (Image: Nottingham Post)

"We are doing okay," he said. "I don't see the trend that people are not spending as much as they were. All we can do every day is keep people that are coming in and shopping with us happy."

According to the report, the most recent employment rate for 2017 is not dissimilar from 2010, when the figure was at 55 percent. But it is still way off the city's pre-recession level of 62.5 percent in 2007. Early indications suggest it has since grown in 2018.

The fall can be put down to a number of reasons including the city's employment scene becoming more dominated by one sector - business administration and support services.

This sector includes agency work and call centres and is more vulnerable to demand from other sectors dropping and from their roles becoming automated. This is different to former big employers in Nottingham such as Raleigh and Players, which had large numbers of highly skilled roles.

The report also puts the decline down to people who are "economically inactive", which are those who are not employed or unemployed or have stopped actively looking for work. This includes students, early retirees and full time parents.

Aside from students, people who are long-term sick account for the largest amount of economic inactivity with more than 20,000 people.

The team behind the report say there has been a surge in skilled workers within recent years and that the overall picture shows a dedicated workforce.

One of its co-authors, Chris Lawton, a senior lecturer in the economics department at the university, said: "A lot of the things we are experiencing, such as a prolonged period of low pay, is fundamentally the UK economy struggling for 20-30 years, the loss of good jobs in manufacturing, the loss of good working class jobs and replacement of a lot of those jobs with services to services. This makes it challenging to see how we create good work for everyone."

Paula Black, director of the Nottingham Civic Exchange, added: "Although there are some really good stories about Nottingham - there is a really good story about it being a place where wealth is generated and there are professional jobs - the decline in employment and weakening of the labour market in the bottom end concerns me.

"Compare it to Derby. It has a lot high household income because it has Bombardier, it has Rolls-Royce, Nottingham doesn’t have that so as that long term change has happened, increasingly we are reliant on those service sector jobs like retail, back office, agency work and care. We have shifted our economy."

Dr Black believes local authorities, local enterprise partnerships and businesses need to come together to resolve the issue as there has been too much of a focus on quantity of jobs being created rather than quality jobs.

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She added: "This isn't knocking Nottingham, because we all love our city, we all work here, we are very committed here. This is about trying to do good things for Nottingham."

The researchers have pointed to various campaigns such as a Living Wage and Good Work Standard charters - awarded to employers to show good employment practices - as ways to improve the picture.

Chris Henning, corporate director for development and growth at Nottingham City Council, said the report made "valid points" around issues including low pay and unsecure work.

He pointed out the boundary of the city does not 'include more affluent suburbs of Greater Nottingham" and that it can be skewed by student numbers.

He added: "We recognise that there are specific issues in Nottingham and continue to work with our partners to support local people and boost the city’s economy. As well as falling unemployment in the past five years, we are investing strongly in local transport to connect people to opportunities and developing more affordable homes.

“We continue to attract new businesses to the city, something Nottingham was nationally acclaimed for just over a year ago, while close to 85 percent of local schools are now rated as either good or outstanding by Ofsted.”